Twitter is building a media business using other people’s content

Gigaom

As Twitter continues to build out new features such as “expanded tweets” and curation-based services like its NASCAR editorial offering, it has become pretty obvious where the company is headed: it has given up on being a utility built on open APIs and is becoming a media company, powered by a rapidly-growing advertising platform. Twitter also has one big advantage that other media companies don’t: the fact that it doesn’t have to produce any of the content, but simply acts as a filter for information from other sources. Its success will be determined by how well it strikes a balance between helping other media entities and competing with them.

Twitter CEO Dick Costolo has repeatedly resisted suggestions that Twitter is a media entity, perhaps in part because the company wants to be seen as a partner for traditional media companies like newspapers and TV networks. But as its advertising business grows larger — thanks in part to reports from advertisers of “staggering” levels of engagement with ad features like promoted tweets — and it continues to tighten the rules on its API to squeeze out third-party developers, it becomes more and more clear that Twitter’s future is based on controlling access to the information flowing through the network as closely as possible.

Twitter’s future lies in capturing more user attention

The “expanded tweets” feature, which is currently being used by a number of media companies such as the New York Times (and GigaOM), is a glimpse of what this future looks like: if a tweet contains a link to an article or webpage that uses special tags, users can expand the tweet to show an excerpt of the original — or a video or photo or other content — inside the Twitter app or in a tab on Twitter.com. In an interview this week with the Los Angeles Times about the company’s plans, Costolo said something interesting about how Twitter sees its role. According to the newspaper, he said:

Twitter is heading in a direction where its 140-character messages are not so much the main attraction but rather the caption to other forms of content.

So instead of being a simple information utility that distributes 140-character messages, many of which contain links to other kinds of content, Twitter wants to become something more like a destination. Instead of sending people who click those links away to other websites and media outlets, the company wants to hang onto users for a little longer by showing them excerpts of that content inside its own frame — and it wants to do this primarily so that it can capture more of their attention, since that’s what advertising-based media players do. But then who ultimately gets to retain the value of that attention, Twitter or its media partners?

As I’ve argued before, this isn’t all that different from what the New York Times and other traditional media outlets are trying to do: namely, to walk the tightrope between pushing people away by giving them links to content elsewhere, and trying to hold onto them long enough to show them ads. Even Google is struggling with this dilemma — the company used to be known for the speed with which it sent users elsewhere, but over the past few years it has been spending more and more time trying to capture the attention of users and hold onto them for longer with services like Google+ and its Search Plus Your World feature. Facebook is also trying to be a partner for media companies, but to some extent is a competitor for attention and ad dollars as well.

Send users away, or try to keep them inside your app?

In a recent interview with Om as part of paidContent 2012 in New York, Betaworks CEO John Borthwick made a good point about the tension between pushing people away and holding them in. As he put it:

The grain of Twitter moves with the grain of the web; it’s similar to Google in that it’s a discovery platform that pushes you out. Now they’ve said “We’re going to be a media company” — but the grain of that moves in the opposite direction, to try and keep people in one place, to almost create a walled garden.

The big challenge for Twitter, then, is to somehow manage that transition properly. How does it capture — and to some extent control — more and more content from outside sources, so that it can hang onto users for longer and show them ads, without irritating the media companies and other entities that it relies on for that content? This is why critics such as blogging pioneer Dave Winer argue that Twitter is more of a competitor for media companies than a partner, because it is trying to do fundamentally the same thing that media outlets are trying to do, and it is doing so by using content that belongs to others.

This isn’t all that different from what services like Flipboard and Zite do: they also take content from other sources and aggregate and filter it, and they also walk a fine line by showing excerpts of an original source, or in some cases showing the whole thing inside their own frame (something Zite was threatened with a lawsuit over early in its career, before it was acquired by CNN). Some media companies are seeing the companies as partners — as the New York Times has with Flipboard and the Wall Street Journal has with Pulse — but they could also be seen as competitors in many ways.

Is Twitter a friend and helper to media companies, or a growing rival for both attention and ad dollars? Is it more focused on sending users away or on keeping them inside its walled garden? Those are the questions that anyone interested in Twitter’s future — either as a service or as a business — needs to think about.

Post and thumbnail images courtesy of Flickr users George Kelly and jphilip

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